Moody’s drops Crossmark, loans

Moody's Investors Service said it downgraded Crossmark Holdings, Inc.'s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

In a related action, the agency lowered the ratings on Crossmark's senior secured first-lien bank credit facility to B2 from B1 and senior secured second-lien term loan to Caa2 from Caa1.

The outlook is negative.

Moody’s said the downgrade reflects the rapid deterioration in the company's credit metrics following the largely debt-financed 3Q13 acquisition of Marketing Werks, Inc. Debt leverage, measured as adjusted debt/EBITDA, increased to 10.3 times as of Sept. 30 from 6.1 times (pro forma) at the time of the acquisition (all metrics incorporate Moody's standard adjustments), and the agency projects that this could remain above 7.5 times by the end of 2016.

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